Such a move would mark a rare instance of an investigating agency questioning a sitting PM and could expose the govt to more Opposition attacks.

Such a move would mark a rare instance of an investigating agency questioning a sitting PM and could expose the govt to more Opposition attacks.

NEW DELHI: The Central Bureau of Investigation (CBI) will record a statement from Prime Minister Manmohan Singh in the controversial coal block allocation involving Birla group's Hindalco because the court-monitored nature of its investigation has left it with little leeway, agency officials say.

A senior CBI official told ET the agency, which last week named Aditya Birla Group Chairman Kumar Mangalam Birla, former coal secretary PC Parakh and other unnamed officials in an FIR and accused them of criminal conspiracy for undue favours, would "go up the whole chain" strictly "as per the Criminal Procedure Code". "We will first summon the named accused - Parakh first, followed by Birla."

Next to be questioned will be coal ministry and PMO officials who remain unnamed in the FIR, but were involved in the process of putting up a proposal... Ultimately, CBI will need to record the PM's statement as he as coal minister approved the allocation," the official said, adding it was not decided whether CBI will seek to meet the PM in person to record his statement or send him a questionnaire.

Such a move would mark a rare instance of an investigating agency questioning a sitting prime minister and could expose Singh and his government to more Opposition attacks. The government maintains it has done nothing wrong and senior cabinet minister Kamal Nath said last week the PM was open to face CBI's questions.

PMO said in a statement on Saturday that Singh was satisfied the decision on Hindalco, which in 2005 received rights to a coal block originally denied to it and allotted to a state-run firm, was "entirely appropriate and based on merits of the case placed before him".

CBI officials said PMO's statement merited a clarification to be sought from the PM regarding the events while noting that they hadn't formed any view on his culpability in the case. "The proposal with a changed stand from before was prepared by the bureaucrats of coal ministry, handled in PMO and put up to the PM for approval. We do not know if the PM was misled," the official said, requesting anonymity because of the sensitivity of the case.

CBI's decision to file an FIR in the case took many by surprise and has exposed the agency to criticism from industry figures and some cabinet ministers, all of whom say it will harm the country's investment climate and hurt economic revival. Retired and serving bureaucrats have slammed CBI for naming Parakh in the FIR and warned it could harm decision making and exacerbate the policy paralysis.

CBI, meanwhile, plans to wait for the Supreme Court hearing on October 29 to know its reaction to the FIR, which will also find a mention in its status report that will be submitted to the court on Tuesday, before questioning Birla and Parakh.

A CBI official also played down chances of the agency closing the case, explaining that after having lodged an FIR, adopting such a course was not entirely in its hands.

"The Supreme Court, which is monitoring the probe, will take a view on the FIR. If CBI is not able to find evidence against anyone and wishes to close the case, the apex court will need to be informed. Also, a trial court must accept the closure report. But as for now, we feel we have a strong case of rules being clearly bent for extending undue favour to Hindalco," the official said.

CBI officials also feel this to be a "test case" for its autonomy, especially in a court-monitored investigation where it has been criticised by the highest office in government and the corporate world. "CBI cannot be seen to be coming under government or corporate pressure to close its probe," one investigator said.

CBI Director Ranjit Sinha had told ET in an interview on October 16 that Birla and Parakh may be found innocent at the end of the probe.

A senior government minister, meanwhile, told ET that the real problem was Section 13 1(d) of the Prevention of Corruption Act, which did not require any quid quo pro to be established for a corruption case. CBI has invoked this section to book Parakh and Birla.

"The Prevention of Corruption Act was formed in 1988 and since then many changes in the country's economy and bureaucracy have taken place. Section 13 1(d) constitutes an undue favour to an entity as a misuse of official position even if there is no quid quo pro, and is very loosely worded. It needs to be appreciated that there might be an error of judgement and a bona fide mistake by a bureaucrat. An amended legislation pending before a standing committee of Parliament will address this anomaly," the minister said.

The new legislation that is pending Parliament approval also makes it mandatory for CBI to seek a prosecution sanction from the government, even for retired officials - a safeguard that Parakh will not enjoy in the present case if he is charge-sheeted.